HashBridge — A Fully Decentralized Oracle Network on Heco Chain

1. Why do we need oracle?

Smart contracts have revolutionized many industries by eliminating the inconvenience of traditional legal agreements and centrally edited digital protocols. It is well acknowledged that those mentioned above can be manipulated by contracting parties, thus can be problematic. Besides, the blockchains are relatively exclusive, which can’t support smart contracts to communicate with external system consequently. To solve these problems, the new functionality, called an oracle has been introduced. It is able to automatically provide the connectivity to the outside world. The way how it works is the oracle responds to the data requests and feeds smart contracts with the any information that it has collected, its core functionality objective is literally to bridge on-chain and off-chain environment. As all the performance verification and execution completely rely on chain, the decentralization and trustlessness are perfectly guaranteed.

2. The challenges that oracles are encountering

Responding slowly: Since the data integration of most oracles is related to both on-chain and off-chain, the real-time data cannot be dynamically ensured due to the time interval of 2 blocks it takes. Not mention the heavy congestion and high gas fee on Ethereum, responding slowly can be problems to the data caller.

Data inaccuracy: Most existing oracles are centralized services, therefore certain nodes can be monolithic, causing malicious performance as long as it’s more profitable than providing accurate data, making it no more secure than a traditional, centrally run digital agreement.

Limit of data diversity: There are multiple DeFi protocols using data extracted from decentralized exchanges, however, it has been proved the data cannot be sufficient enough due to the lack of trading depth or transaction volume. Additionally, the price of some derivatives, such as stocks, gold etc. are not included in the list.

3. HashBridge Solution

HashBridge offers a whole set of technical solution in order to cater to the need of data request, including community nodes and institution nodes system, price feed upon deposit, data verification, arbitration as well as incentive and penalty mechanism. To maintain the diversity and sustainability of data resource, reputation contract, order-matching contract and aggregating contract are initiated.

The reputation contract monitors performance metrics of data provider while the order-matching smart contract selects bids using the reputation contract. The aggregating contract collects the oracle providers’ responses and calculates the final collective result of the HashBridge query.

4. Roles of HashBridge Actors

HashBridge consists of 3 components and corresponding mechanism, each of them play a quite important role in HashBridge network, enabling it to be a secure and trustless oracle

Data Provider & Incentive Mechanism: HashBridge allows institution nodes to provide price feed by depositing assets. The first batch of institution codes will be generated through the invitation of HashBridge Oracle, all nodes are sure to be independent and no-interfering. In order to be fully transparent and fair, subsequent nodes will be elected periodically by the whole network. Any institution/individuals can be data providers by depositing assets. HBO (HRC-20) will be rewarded as incentives to the providers whose price is successfully verified as valid.

Price Caller and Call Function: Price caller are also so-called oracle services purchasers who specify requirements that contains the price of certain assets, any account or smart contract can be denoted as price caller. As it is described in HashBridge Oracle, any common price feed provided by nodes are free to be called, though, price caller is required to pay extra fee if the price of certain scarce assets such as gold, stocks etc. are being requested. This mechanism is actually to buy back and burn the HBO (HRC-20) in order to maintain the stability of the price.

Verifier and Verification Mechanism: The users who hold a certain amount of HBO can be both verifiers and arbiters. If there is any doubt that the data provider compromises relevant credentials to undertake malicious activity, the price feed offered by provider will need to be verified by depositing HBO. Vote will be launched on HashBridge network, arbiters will decide whether the data offered by provider is fraudulent or not, if so, HBO deposited by data providers will be rewarded to verifier, arbiter as well as allocated to liquidity pool proportionally.

5. HashBridge Vision

HBO DAO

A healthy decentralized platform cannot last long without community support. HashBridge will establish HBO DAO in the future, so that all users can participate in the governance of HBO ecosystem, come up with constructive suggestions and help the HashBridge develop in the right direction to conform to the interests of all participants.

The governance concepts are as follows: 1) The governance token is HBO, each HBO represents same voting right; 2) Holders are able to launch proposal for further development by holding a certain amount of HBO; 3) The proposal can be considered as passed when votes reach to a certain ratio according to the type of proposal.

HashBridge Advantages

As a underlying infrastructure, the oracle plays a quite important in the DeFi world, it has great potential in multiple areas that requires large-scale data, such as lending, insurance, derivatives, and the Internet of Things. With the rapid development of the DeFi world, more advanced oracles are bound to provide more secure and efficient services. HashBridge hopes to provide more complete services for data demanders in the market through this solution.

In conclusion, HashBridge has some unique features that make it competitive in the market:

Decentralization: To achieve complete decentralization, the nodes are generated from reputable institutions by HashBridge invitation, all nodes are disconnected and independent, effectively avoiding being centralized and getting hacked by whales;

Full Security: All processes are executed on-chain, which can be transparent, verifiable and traceable throughout. In addition, the deposit mechanism and penalty system massively increase the cost of malicious behavior, ensuring the security of data;

Responding Fast: HashBridge is powered by Heco chain which has way higher capacity compared to Ethereum. The nearly 0 gas fee help achieve high-frequency price feed in seconds without deviation from the real-time market price, making it possible to respond in a timely way to queries;

Low Cost: Nodes feed and aggregate data on Heco, the gas fee is as low as 1% of the cost on Ethereum;

Fair Distribution and Participation Mechanism: Institution nodes will be invited and regularly re-elected periodically, in addition, 5 community pools are open to any users or investors at any time. The token allocation is guaranteed to be fair and transparent.

HashBridge Long-term Strategy

The HashBridge is designed to fill a pervasive need for new oracle technology in smart contract systems, helping solve the problems encountered by most oracles in the market. As we continue our work on HashBridge, we will seek to prioritize the following core values according to the actual development situation and community suggestions:

1. Decentralization for secure and open systems. HashBridge will introduce both software and hardware module to ensure the sustainability and security of data;
2. Diversity of data resources. The data of more assets will be available in order to meet different types of queries;
3. Cross-chain integration with flexibility. HashBridge will initially be built on Heco chain, but we intend for it to support all leading smart contract networks for both off-chain and cross-chain interactions;
4. Flexible data service system design. HashBridge will specifically come up with a variety of service proposals based on different data queries, so that data providers can aggregate stable data sources.

With these principles in mind, HashBridge looks forward to extending the reach and impact of blockchains and smart contracts by making oracles a secure cornerstone of the ecosystem.